$900 Lumia 800 Bundle: Why It’s Destined for Failure

Photo: Ariel Zambelich/Wired.com

Just about a year ago, Nokia announced it would be partnering with Microsoft to deliver Nokia-branded Windows Phones. The plan was to jumpstart Microsoft’s fledgling smartphone platform, and save the Finnish phone giant, which still owns the worldwide dumbphone market, from a future of irrelevance.

One of the first handsets to spring from that relationship was the Nokia Lumia 800, and it’s finally going to land in the U.S. on Feb. 14. Unfortunately, though, the deal is bittersweet: The 800 will only be available in a bundle with a few other products, and the phone itself is unlocked and unsubsidized.

And the price for the bundle? A whopping $900. Analysts told us the bundle puts the Nokia smartphone line-up in front of a few U.S. eyeballs, but won’t lead to a successful smartphone launch, at least not for the Lumia 800.

“I think they’re trying to give some visibility to the Lumia line in the U.S. beyond the deal with T-Mobile, and [Microsoft] stores give them the ability to do that,” Gartner analyst Van Baker said. Unfortunately, there aren’t that many Microsoft Stores in the wild: There’s just 16 Microsoft Stores in the U.S. at the moment.

The Lumia 800 will be available in cyan, magenta or black, Microsoft says. The bundle, which will be available solely through Microsoft Stores, will include a Nokia Play 360 Wireless Speaker, a Purity HD Stereo Headset, and an in-ear Bluetooth headset, according to The Verge.

“As a bundle, the Lumia 800 is differentiated from other devices, but it’s available through such a limited channel,” Canalys analyst Chris Jones told Wired. Because of its limited availability and high price, Canalys doesn’t believe the Lumia 800 will make any impact in the U.S. “It’s a launch that’s not needed,” Jones said.

The Lumia 800, announced at the same time as the budget-friendly Lumia 710, has been available for a few months in Europe (where it would “create consumer impact,” Jones said). The 710 was the first Lumia to launch in the U.S., arriving on T-Mobile for $50 in January — an obvious attempt to grab first-time smartphone buyers.

But the 800’s high price tag, along with its lack of a carrier subsidy, will be a significant barrier for anyone who’s been looking to score the handset.

Baker notes that very few people buy unlocked phones in the U.S. “The vast majority of phone sales are sold on a subsidized basis,” Baker said.

Jones concurs. “It’s a strange decision. They should really be focused on the launch of Lumia 900. There’s lots of competition at the premium end of the market, and this is a distraction for them.”

Announced at CES 2012, the Lumia 900 is the 4G LTE follow-up to the 800, and is a really big deal: The 900 will be the first Nokia handset to be launched in the U.S., deviating from Nokia’s norm of launching in Europe and other countries before America. Even better for consumers, rumors say the 900 will be subsidized and cost a mere $100 when it lands stateside March 18. Besides that, it comes with a 4.3-inch display that’s palpably larger than the 800’s 3.7-inch screen.

So do the math. Which one would you buy, the 800 or 900?

Although the Lumia 800 launch may seem like a bit of a misstep for a pair of companies trying desperately to grab smartphone market share, Baker thinks it’s just part of Microsoft and Nokia’s larger plan at gaining exposure for the Lumia line.

“It’s an opportunity to get Nokia technology in front of consumers in Microsoft stores, and if they sell a few that’s great,” Baker said. The companies likely had trouble getting carrier support for the smaller-screened, non-4G handset, which is why it didn’t launch in the U.S. sooner. “They can put it in front of consumers, so even consumers waiting for the 900 can get a feel for what the Windows Phone OS is like.”

Unfortunately, as far as expected sales go, the Lumia 800, for all intents and purposes, will likely be dead on arrival.